Blackstone buys $1 billion loan portfolio from Germany’s PBB

Blackstone, the largest owner of commercial real estate in the world, has bought a $1 billion performing senior mortgage loan portfolio from Deutsche Pfandbriefbank AG (PBB) as the German real estate lender manages its balance sheet through divesting assets.

Steve Plavin, Senior Managing Director, Blackstone Real Estate Debt Strategies

The portfolio comprises 11 loans secured against performing multifamily, office and hospitality assets in the US and UK, Blackstone said in a statement, and “the loans are backed by cash-flowing, well-located assets with experienced borrowers.” Its real estate debt strategies unit is acquiring the assets on an all-cash basis, Blackstone said, without disclosing what it is paying for the loans.

The sale comes as part of a broader strategy by PBB to manage its balance sheet as it deals with the impact of volatile commercial real estate markets. The lender, one of the largest issuers in the market, known for its expertise in the German Covered Bond market, and has a strong positioning in green transition finance. PBB, like other European banks, was hit by fears that troubles in the US commercial property markets could be spreading to Europe.

“We are excited to acquire this diversified portfolio of performing loans across property sectors and geographies on behalf of our investors,” said Steve Plavin, senior managing director, Blackstone Real Estate Debt Strategies. “We have established ourselves as a trusted counterparty for financial institutions, such as PBB, as they look to optimise their balance sheets. This transaction reflects our expertise, strong relationships, and our ability to deploy scale capital with speed and certainty.”

Blackstone has originated or acquired more than $190 billion of real estate loans and securities since it established its real estate credit business, Blackstone Real Estate Debt Strategies (BREDS).

Blackstone Real Estate Income Trust (BREIT) recently completed the acquisition of a 20% stake in the $17 billion Signature Bank commercial real estate debt portfolio. The portfolio includes more than 2,600 first mortgage loans on retail, market rate multifamily and office properties, located mainly in the New York metropolitan area.